Cairn India shareholders approve merger with Vedanta

Requiring support of at least half of the 40.12 per cent minority shareholders of Cairn India, the deal got support of 72.43 per cent of the minority votes, the company said in a regulatory filing.PTI | September 13, 2016, 08:32 IST

New Delhi: Cairn India shareholders today approved merger of the company with its parent Vedanta Ltd after LIC and Cairn Energy plc of UK voted in favour of the sweetened merger ratio.

Requiring support of at least half of the 40.12 per cent minority shareholders of Cairn India, the deal got support of 72.43 per cent of the minority votes, the company said in a regulatory filing.

The voting percentage was indicative of state-run Life Insurance Corp (LIC) as well as the company's erstwhile parent Cairn Energy plc voting it favour of the deal.

LIC holds 9.06 per cent stake in Cairn India while Cairn Energy has 9.82 per cent. But of their support the deal could not have mustered the requisite majority support of minority shareholders.

"The scheme has been approved by a majority of the minority shareholders," the filing said adding together with promoter, the deal got support of 92.86 per cent of shareholders.

Of the members present and validly voting, "65.41 per cent in number, representing 92.86 per cent in value, voted in favour of the resolution approving the scheme," it said. "The public shareholders of the company have casted 72.43 per cent of votes (in value) in favour of the resolution."

Talking to , Vedanta Group Chairman Anil Agarwal said India should focus on resources below the ground to cut its imports and boost employment.

"We are 85 per cent dependent on imports for our oil needs and 100 per cent for gold and copper. We have resources and it is time that we focus on exploiting them," he said adding the merger was aimed at creating a firm that will help monetise them.

Vedanta shareholders had last week approved the merger under a revised all-share deal.

In a bid to salvage the merger of cash-rich oil firm Cairn India with its debt-laden parent Vedanta Ltd, the billionaire Anil Agarwal-led group had in July sweetened the deal by offering three additional preference shares in hope of winning over minority shareholders like LIC.

Through the merger, Agarwal is looking to create India's largest diversified natural resources firm, which could compete with BHP Billiton Ltd and Vale SA.

In the revised offer, Vedanta will give minority shareholders of Cairn India one equity share and four redeemable-preference shares with a face value of Rs 10 each. The preference shares will carry a coupon of 7.5 per cent and tenure of 18 months.

Vedanta is said to be wanting to use Rs 23,290 crore cash lying with Cairn to pay off part of its Rs 77,952 crore debt. It had in May rolled over a controversial USD 1.25-billion loan taken from the cash-rich oil explorer Cairn India in July 2014.